﻿Firms often cooperate and compete simultaneously with their alliance partners.
This thesis attempts to explore the mechanisms that firms can use to promote
cooperation and limit competition in competitor alliances. Specifically, I investigate
how firms can minimize competition through alliance designs such as alliance scope and
alliance governance, while maximizing cooperation through resource complementarity,
repeated alliance experience and external technological uncertainty. I also examine
firms’ relative bargaining power in their value appropriation from competitor alliances.
The data were collected from four industries (computer, pharmaceutical, steel, and food)
in the United States from 1980 to 2006, and an event study methodology was used. The
findings suggest that, in order to benefit from competitor alliances, firms need to form
equity governance mode, find partners with resource complementarity, form competitor
alliances with repeated partners, and conduct competitor alliances under a high degree
of technological uncertainty. It is also interesting to find that small firms, compared with
large firms, are likely to reap more market returns from competitor alliances.